Health insurance premium hike: Gave approval to change base prices only by 5%, says IRDAI

The insurance regulator on December 3 clarified that it has given permission to change health insurance premiums only by 5 percent.

Several customers had complained about close to 30-35 percent increase in their health insurance premiums in FY21. A few reports had attributed this increase to regulatory changes around standardisation leading to this rise.

However, the Insurance Regulatory and Development Authority of India (IRDAI) clarified that non-life and standalone insurers were permitted to change the base premium up to +/- 5 percent of originally approved premium rates in order to comply with the guidelines on standardisation of exclusions as a one-time measure for seamless transition of existing products to ensure viability and sustainability.

IRDAI also said that as on September 30, 2020, out of 388 products, premiums were increased by general and health insurers up to 5 percent of the then prevailing rates only in the case of 55 products. Customers had also complained that there was a sudden spike in premiums despite no significant claims being made in the previous year. As per insurance regulations, any premium hike in a product category can be implemented only after IRDAI approval.

Premiums are increased if there are large claims in a particular product and also if medical inflation has been on the rise. Hospital charge increases also lead to a premium hike.

The regulatory body clarified that it has cleared revision in premium beyond 5 percent in respect of only five health insurance products of general/health insurers during the year up to November 30. This, it said, is part of the periodical modification of their respective products, based on the incurred claims experience.

Source: Money Control